Based on a recent poll of municipal councils, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising savings to manage increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Wider Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
Research of regional authorities this week further found council budgets being stretched by the growing number of young people and adults needing Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) covering English councils, several participating urban areas were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” stated a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
